Pricing and Price Caps

The Postal Accountability and Enhancement Act of 2006 (PAEA) changed the way the Postal Service sets rates. It divided postal services into two broad categories: market dominant (mailing services) and competitive (shipping services). Market dominant products constitute about 90 percent of postal revenue. They include First-Class Mail, Standard Mail, Periodicals, and some Package Services. Products such as Priority Mail, Express Mail, and bulk Parcel Post are considered competitive. The PAEA placed a cap on price increases for market dominant products.

 

A Penny for Your Thoughts?

Stamp prices are traditionally in whole cent increments. That means it is difficult to target a particular percentage increase. For instance, a one-cent increase on the 42-cent stamp would have been 2.4 percent; while the two-cent increase was 4.8 percent.

 

Periodicals

Since the earliest days of the Post Office there has been a public policy goal of promoting the dissemination of information throughout the country. This goal was also part of all 14 of the rate cases conducted under the Postal Reorganization Act. By law, rates had to consider “the educational, cultural, scientific, and informational value to the recipient of mail matter.” This provision generally tempered the increases for Periodicals, or at least kept the “institutional cost burden” for Periodicals to a minimum.

 

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Recent Comments

  • 2 days 11 hours ago
    The problem is that some packages are too large and heavy for the resources that many stations and districts have available. In the search of revenue and flat rate shipping the product is more than a...
  • 4 days 19 hours ago
    Are delivery drivers allowed to not attempt delivery of your package because their car was too full and they didn't have room for your larger boxes? I've received 2 notices via e-mail that...

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